We all know that foreclosures are hard on homeowners, and that they can hurt a neighborhood’s property values. But you might not realize the effects they have on localities.
At the Governor’s Housing Conference in Richmond this week, Jennifer Leonard of the Center for Community Progress and Jeff Blackford from the Fairfax County Department of Code Compliance explained that yes, foreclosures put a lot of pressure on local governments too.
Here come the bullet points:
- Between falling property assessments and vacant homes with no apparent owners to send tax bills to, localities are seeing steep drops in property-tax revenues.
- At the same time, cities and counties are seeing their code-enforcement costs go up — there are more vacant homes to board up, and more overgrown grass in front of more vacant homes that needs to be cut, for example. (For example, according to Blackford, Fairfax County spends $250-400 to mow a quarter-acre lot.)
- The lower tax income and rising costs are forcing some cities and counties to make cuts to code enforcement personnel, making neighborhoods less safe.
Speaking of less safe, Leonard and Blackford pointed out that vacant homes bring with them a long list of other problems:
- Illegal activity, from vandalism to meth labs
- Squatters may enter the home and – now that winter is approaching – light fires to stay warm, substantially increasing the fire danger
- Unguarded swimming pools that pose a drowning risk
- Electric companies cut off power to vacant homes when bills aren’t paid. No electricity for sump pumps can mean standing water in basements — think mold and other nasty things
- Dilapidated roofs can lead to collapse
To make it all worse, code enforcement, policing, demolition, planning, and other concerns are often spread around and uncoordinated, making them inefficient and costly.
Some areas have tried to mitigate the problem, although sometimes with unintended consequences. In Danville, for example, the city has taken possession of homes, demolished them, and put liens on the property for expenses. But that makes the properties too expensive in the eyes of prospective buyers, who must pay off the lien before closing on the sale. Therefore, the land just sits there, unused, and the locality receives no tax revenue for the property.
Despite all this, Blackford urges homeowners and property owners associations to report vacant homes to their local code enforcement offices.
If nothing else, local officials can do small things like board up doors and secure pools — it can make a big difference in safety, reduce the cost to the locality in the long term, and increase the likelihood that the homes will be occupied again soon.
After all, isn’t that the point? A lived-in home poses far less risk to the citizens around it and produces property tax revenues that allow localities to provide services.